Credit Card: Credit card will prove to be a game changer for MSME, money will be withdrawn easily; know how to get benefit..

The introduction of credit cards for micro, small, and medium enterprises (MSMEs) is expected to be a transformational move, providing easy access to finance. However, industry experts say the loan disbursal process has to be streamlined to ensure that financial benefits reach businesses.

The Union Budget 2025 has been widely welcomed by the MSME sector for its emphasis on financial support, digitization, and sector-specific initiatives. One of the most significant announcements is the issuance of 10 lakh credit cards to micro-enterprises, each with a limit of Rs five lakh.

Benefit deal for small traders
Industry players say the move will enhance financial inclusion and ease liquidity challenges for small businesses. Jyoti Prakash Gadia, managing director of Resurgent India, called the credit card initiative for micro-enterprises registered on the Udyam portal a game changer.

He said financial access remains a challenge for small businesses and the move will significantly ease their working capital constraints.

How much loan is likely to be available in the next five years

He said the announcement of 10 lakh credit cards with a limit of Rs 5 lakh for micro-enterprises is a big boost for the availability of much-needed finance for enterprises registered in the Udyam portal. Additionally, the budget has increased the credit guarantee cover for micro-enterprises from Rs 5 crore to Rs 10 crore. This move is expected to provide additional loans of Rs 1.5 lakh crore in the next five years.

It is important to address the challenges of MSMEs

Despite these positive steps, the industry says that ensuring timely access to credit remains a challenge. Mukul Goyal, co-founder of Stratfix Consulting, has pointed out the need to reduce bureaucratic hurdles in the loan disbursal process.

Goyal said these measures are promising, but it is important to address the persistent challenges faced by MSMEs. Access to timely and affordable credit remains a barrier for many small businesses.

How will you get the benefit?

It is worth noting that under MSME, there is a facility to give a loan of Rs 3 lakh to micro-entrepreneurs. However, from now onwards, those registered with the Udyam portal will be able to get a credit card with a limit of Rs 5 lakh. The government plans to issue 10 lakh such credit cards.

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